Lloyds levies £135 fee on a 1p overdraft

The bank is squeezing customers who accidentally slip into the red as it struggles to shore up its profits

Lloyds TSB, which has nearly one in five of the UK’s current accounts, has come under fire for craftily changing the overdraft rules for 8m customers in a move that could result in charges of as much as £135 if you slip into the red by 1p.

The ploy, which follows a hike in overdraft rates last month, will net the bank an estimated £70m in extra revenue.

The bank is thought to have made the move on unauthorised borrowing to boost revenues ahead of a clampdown on overdraft fees by the Office of Fair Trading (OFT), expected next spring.

At the moment, Lloyds gives a little leeway to customers who accidentally slip into the red or exceed their overdraft limit. If they become overdrawn by less than £10 without permission they are not charged the usual £30 fee, although they do pay interest at 29.8 per cent.